New way to watch movies while flying lands at MSP

This week the Minneapolis-St. Paul International Airport will debut, for the first time anywhere, a dozen vending kiosks that rent or sell movies on a computer flash drive that can be watched on a Windows PC.

There are a lot of screens on which to watch new movies: TV, laptop, iPad or smartphone.

But until now you needed a TV signal, a disk, or a movie-streaming Internet connection.

Not for long. This week the Minneapolis-St. Paul International Airport will debut, for the first time anywhere, a dozen vending kiosks that rent or sell movies on a computer flash drive that can be watched on a Windows PC.

The rental service, from a company called Digiboo in Santa Monica, Calif., is being introduced at a time when consumers are shifting away from movie rentals to online movie streaming. Whether the Digiboo kiosks mark the next evolution in watching video, or just another dead end like the Betamax VCR, they illustrate the enduring allure of the movies even as technology morphs them into new forms.

But Digiboo's advantage may be that its service is initially aimed at air travelers who, for the most part, don't have access to Internet streaming while on a plane. The exceptions are some flights from Delta Air Lines and American Airlines, which have begun offering passengers downloadable movies and TV shows via an aircraft computer system.

"It's a convenience," said Blake Thomas, Digiboo's chief marketing officer, in an interview. "A customer doesn't have to plan ahead, or to have ever downloaded one of our movies before. He or she can make the decision at the airport, just like buying M&Ms or magazines."

The Digiboo service is available to anyone with a credit card, a newer flash drive and a Windows PC (with an XP or newer operating system). Consumers can rent a film for $3.99, or buy one for $14.99, Thomas said. Kiosk-to-flash-drive downloads take about 30 seconds using a USB 3.0 flash drive, and from two to five minutes on an older USB 2.0 device. Consumers must provide the flash drive.

"I used their kiosk to rent a movie, and it was slick," said Bruce Rineer, manager of concessions and business development for the Metropolitan Airports Commission. "The movie downloaded to my flash drive in about 25 seconds."

Customers must go online the first time they use the service to register the computer the movie will be played on. They then have 30 days to watch a movie, and, once started, a movie must be watched within 48 hours.

While the service invites comparison with Redbox DVD rental kiosks, Thomas said the services aren't comparable because Digiboo kiosks offer 600 movies, far more than a Redbox, and there's nothing to return. The Digiboo movies include recent films such as "Bad Teacher," "Captain America" and "Hugo."

The kiosks will be updated with new movie releases weekly, and will get new movies on the same day they're available on DVD, Thomas said. Digiboo offers only standard-definition movies because, so far, the studios have been unwilling to license the company their high-definition movies, he said.

Some of the big movie studios recently endorsed the concept that Digiboo is pioneering. In February, Twentieth Century Fox Home Entertainment and Warner Bros. Home Entertainment Group announced Project Phenix, which by the end of this year will enable consumers to download high-definition movies to their portable devices from either a public kiosk or a home disk drive. HBO also has said it may offer movies on flash drives as part of its existing HBO Go service, which today is limited to Internet streaming of movies and HBO shows.

Thomas said Digiboo has no connection to the movie studios beyond a standard licensing agreement to distribute their films. So far, Digiboo offers movies from Warner Bros., Sony, Paramount and Lions Gate studios.

Digiboo was started by three former MGM home video executives. Actor Morgan Freeman was an early investor through his firm Revelations Entertainment. In September, Digiboo received an unspecified cash infusion from investment firm Norby Corp. in exchange for an equity stake.

Still, it's taken four years for Digiboo's kiosks to hit the market.

"There's nothing like launching a start-up company during the worst recession in recent history," Thomas said. "Fundraising took longer than we'd expected."

Following the initial installation at the Twin Cities airport, Digiboo will install the kiosks in the Seattle and Portland airports, Thomas said. If the concept is successful, thousands of kiosks will be put in a variety of public places, he said.

But Digiboo's success is far from guaranteed because analysts say the movie rental business is declining. DVD movie rental revenue declined 3 percent last year, while online movie viewing revenue grew 51 percent, according to a January report by analyst Michael Nathanson of Nomura Securities in New York.

Netflix and Hulu, the main sources of movie streaming last year, "were a major source of industry growth," Nathanson wrote.

Another analyst says consumers are so used to the ease of using streaming video that they may not want to bother loading a movie onto a flash drive.

"It's too much work," said Michael Pachter, an analyst at Wedbush Securities in Los Angeles. "I don't see it succeeding."

But Digiboo argues that it has the advantage of a captive and motivated audience at airports.

"Airports are great locations because of the amount of foot traffic, and the need for a movie," Thomas said. "People are on the go, often have time to kill and typically have a laptop or tablet computer."